Forex Market: AUD/USD trading outlook for March 28th

Friday’s trade saw AUD/USD within the range of 0.7489-0.7538. The pair closed at 0.7508, edging down 0.29% on a daily basis. It has been the 10th drop in the past 21 trading days and also a third consecutive one. The daily high has been a lower-high test of the high from March 24th. In weekly terms, AUD/USD lost 1.25% of its value during the current week. It has been the 5th drop in the past 12 weeks and also the steepest one since the week ended on January 10th. AUD/USD has trimmed its advance to 5.14% so far during the current month, following a 0.80% gain in February.

On Monday (March 28th) AUD/USD trading may be influenced by the following macroeconomic reports listed below.

Fundamentals

United States

Personal Income, Personal Spending

Personal spending in the United States probably rose 0.1% in February, according to market expectations, while personal income was probably up for an 11th consecutive month in February, increasing at a monthly rate of 0.1%.

Consumer spending, which accounts for over two thirds of the nations GDP, rose 0.5% in January, due to higher expenditures on durable goods and services. At the same time, personal income increased 0.5% (USD 79.6 billion) during the same month, while disposable personal income (DPI) rose by USD 63.5 billion.

Wages and salaries were up USD 48.1 billion in January, following an increase by USD 18.3 billion in the preceding month, while supplements to wages and salaries rose USD 6.5 billion in January, after going up USD 5.0 billion in December.

Higher-than-expected rates of increase imply good employment conditions and, therefore, are dollar positive. The Bureau of Economic Analysis is to publish the official figures at 12:30 GMT.

Pending Home Sales

The index of pending home sales in the United States probably rose 0.8% in February, according to the median estimate by experts. If so, this would be the sharpest monthly increase since April 2015, when sales went up at a revised down 2.7%. In January pending home sales unexpectedly fell 2.5%, or the most since December 2014.

In annual terms, the index of pending home sales advanced 1.4% in January, which has been a 17th consecutive period of increase. However, Januarys rate of sales growth has been the slowest since September 2014, when sales were up 1.0%.

In case pending home sales increased at a faster pace than anticipated, this would have a moderate bullish effect on the US dollar. The National Association of Realtor’s (NAR) will report on the official index performance at 14:00 GMT.

Correlation with other Majors

Taking into account the week ended on March 25th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to NZD/USD (0.9076, or very strong)
AUD/USD to EUR/USD (0.8146, or very strong)
AUD/USD to GBP/USD (0.5583, or strong)
AUD/USD to USD/JPY (-0.6655, or strong)
AUD/USD to USD/CHF (-0.7751, or strong)
AUD/USD to USD/CAD (-0.9811, or very strong)

1. During the examined period AUD/USD moved almost equally in one and the same direction with EUR/USD and NZD/USD. This relationship has been the most pronounced between AUD/USD and NZD/USD.

2. AUD/USD moved almost equally in the opposite direction compared to USD/CAD during the week.

3. AUD/USD moved strongly in one and the same direction with GBP/USD during the period in question, while moving strongly in the opposite direction compared to USD/JPY and USD/CHF.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7512
R1 – 0.7534
R2 – 0.7561
R3 – 0.7583

S1 – 0.7485
S2 – 0.7463
S3 – 0.7436

By using the traditional method of calculation again, the weekly pivot levels for AUD/USD are presented as follows:

Central Pivot Point – 0.7545
R1 – 0.7614
R2 – 0.7721
R3 – 0.7790

S1 – 0.7438
S2 – 0.7369
S3 – 0.7262